Organizations are combining resources through acquisitions and alliances in record numbers. Since publication of our original study in 1991, research has confirmed that resource complementarity creates the potential for greater synergy from acquisitions and alliances, leading to higher long-term firm performance as an end result. The valuable, unique, and inimitable synergy that can be realized by integrating complementary resources provides an opportunity for the firm to create competitive advantages that can be sustained for a period of time. In addition, complementary resources present opportunities for enhanced learning as well as the development of new capabilities. However, we also suggest that the existence of complementary resources is a necessary but insufficient condition to achieve synergy. The resources must be effectively integrated and managed to realize the synergy.
References
1.
Ansoff, H. I. (1965). Corporate strategy: An analytic approach to business policy for growth and expansion. New York: McGraw-Hill.
2.
Barkema, H. G., & Vermeulen, F. (1998). International expansion through startup or acquisition: A learning perspective. Academy of Management Journal, 41, 7–26.
3.
Barney, J. B. (1988). Returns to bidding firms in mergers and acquisitions: Reconsidering the relatedness hypothesis. Strategic Management Journal, 9 (Special Issue), 71–78.
4.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99–120.
5.
Barney, J. B. (2001). Is the resource-based “view” a useful perspective for strategic management research? Yes. Academy of Management Review, 26, 41–56.
6.
Barney, J., & Hansen, M. H. (1994). Trustworthiness as a source of competitive advantage. Strategic Management Journal, 15 (Winter Special Issue), 175–190.
7.
Barringer, B. R., & Harrison, J. S. (2000). Walking a tightrope: Creating value through interorganizational relationships. Journal of Management, 26, 367–403.
8.
Chatterjee, S. (1986). Type of synergy and economic value: The impact of acquisitions on merging and rival firms. Strategic Management Journal, 7, 119–139.
9.
Child, J., and Faulkner, D. (1998). Strategies of cooperation: Managing alliances, networks and joint ventures. Oxford, U.K.: Oxford University Press.
10.
Coff, R. W. (1999). How buyers cope with uncertainty when acquiring firms in knowledge-intensive industries: Caveat emptor. Organization Science, 10, 144–161.
11.
Datta, D. K. (1991). Organization fit and acquisition performance: Effects of post-acquisition integration. Strategic Management Journal, 12, 281–297.
12.
Doh, J. P. (2000). Entrepreneurial privatization strategies: Order of entry and local partner collaboration as sources of competitive advantage. Academy of Management Review, 25, 551–571.
13.
Dubofsky, P., & Varadarajan, P. (1987). Diversification and measures of performance: Additional empirical evidence. Academy of Management Journal, 30, 597–608.
14.
Dyer; J. H. & Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of Management Review, 23, 660–679.
15.
Elgers, P. T., & Clark, J. J. (1980). Merger types and shareholder returns: Additional evidence. Financial Management, 9 (2), 66–72.
16.
Gulati, R., Nohria, N., & Zaheer, A. (2000). Strategic networks. Strategic Management Journal, 21, 203–215.
17.
Harbison, J. R., & Pekar, P. (1998). Smart alliances. San Francisco: Jossey-Bass Publishers.
18.
Harrison, J. S., Hall, E. H., & Nargundkar, R. (1993). Resource allocation as an outcropping of strategic consistency: Performance implications. Academy of Management Journal, 1026–1051.
19.
Harrison, J. S., Hitt, M. A., Hoskisson, R. E., & Ireland, R. D. (1991). Synergies and post-acquisition performance: Differences versus similarities in resource allocations. Journal of Management, 17, 173–190.
20.
Harrison, J. S., O’Neill, H. M., & Hoskisson, R. E. (2000). Acquisition strategy and target resistance: A theory of countervailing effects of pre-merger bidding and post-merger integration. In C. Cooper & A. Gregory (Eds.), Advances in mergers and acquisitions (pp. 157–182). New York: JAI Press.
21.
Haspeslagh, P. C., & Jemison, D. B. (1991). Managing acquisitions: Creating value through corporate renewal. New York: Free Press.
22.
Hitt, M. A., Bierman, L., Shimizu, K., & Kochhar, R., 2001a. Direct and moderating effects of human capital on strategy and performance in professional service firms: A resource-based perspective. Academy of Management Journal, 44, 13–28.
23.
Hitt, M. A., Dacin, M. T., Levitas, E., Arregle, J., & Borza, A. (2000). Partner selection in emerging and developed market contexts: Resource-based and organizational learning perspectives. Academy of Management Journal, 43, 449–467.
24.
Hitt, M. A., Keats, B. W., & DeMarie, S. (1998). Navigating in the new competitive landscape: Building strategic flexibility and competitive advantage in the 21st century. Academy of Management Executive, 12 (4), 22–42.
25.
Hitt, M. A., Harrison, J. S., & Ireland, R. D. (2001b). Mergers and acquisitions: A guide to creating value for shareholders. New York: Oxford University Press.
26.
Hitt, M. A., Harrison, J. R., Ireland, R. D., & Best, A. (1998). Attributes of successful and unsuccessful acquisitions of U.S. firms. British Journal of Management, 9, 91–114.
27.
Hitt, M. A., Ireland, R. D., & Harrison, J. S. (2001c). Mergers and acquisitions: A value creating or value destroying strategy? In M. A. Hitt, R. E. Freeman, & J. S. Harrison (Eds.), Blackwell handbook of strategic management, Oxford, U.K.: Blackwell Publishers, 384–408.
28.
Hoskisson, R. E., & Busenitz, L. W. (2001). Market uncertainty and learning distance in corporate entrepreneurship entry mode choice. In M. A. Hitt, R. D. Ireland, S. M. Camp, & D. L. Sexton (Eds.), Strategic entrepreneurship: Creating a new integrated mindset (pp. XX). Oxford, U.K.: Blackwell Publishers, in press.
29.
Inkpen, A. C. (1996). Creating knowledge through collaboration. California Management Review, 39 (1), 123–140.
30.
Inkpen, A. C. (2001). Strategic alliances. In M. A. Hitt, R. E. Freeman, & J. S. Harrison (Eds.), Blackwell handbook of strategic management, Oxford, U.K.: Blackwell Publishers, in press.
31.
Ireland, R. D., & Hitt, M. A. (1999). Achieving and maintaining strategic competitiveness in the 21st century: The role of strategic leadership. Academy of Management Executive, 13 (1), 43–57.
32.
Ireland, R. D., Hitt, M. A., Camp, S. M., & Sexton, D. L. (2001). Integrating entrepreneurship and strategic management thinking to create firm wealth. Academy of Management Executive, 15 (1), 49–63.
33.
Ireland, R. D., Hitt, M. A., & Vaidyanath, D. (2002). Managing strategic alliances to achieve a competitive advantage. Journal of Management, in press.
34.
Ireland., R. D. & Kuratko, D. F. (2001). Corporate entrepreneurship and middle-level managers’ entrepreneurial behavior: Relationships, outcomes, and consequences. Working paper, University of Richmond.
35.
Jensen, M. C. (1988). Takeovers: Their causes and consequences. Journal of Economic Perspectives, 1, 21–48.
36.
Khanna, T., Gulati, R., & Nohria, N. (1998). The dynamics of learning alliances: Competition, cooperation, and relative scope. Strategic Management Journal, 19, 193–210.
37.
Kogut, B. (1988). Joint ventures: Theoretical and empirical perspectives. Strategic Management Journal, 9, 310–332.
38.
Kogut, B. (1991). Joint ventures and the option to expand and acquire. Management Science, 37, 18–33.
39.
Kuratko, D. F., Ireland, R. D., & Hornsby, J. S. (2001). The power of entrepreneurial actions: Insights from Acordia, Inc.Academy of Management Executive (in press).
40.
Kusewitt, J. B. (1985). An exploratory study of the strategic acquisition factors relating to performance. Strategic Management Journal, 6, 151–169.
41.
Lane, P. J., & Lubatkin, M. (1998). Relative absorptive capacity and interorganizational learning. Strategic Management Journal, 19, 461–478.
42.
Madhok, A. (1997). Cost, value and foreign market entry mode: The transaction and the firm. Strategic Management Journal, 18, 39–61.
43.
Madhok, A., & Tallman, S. B. (1998). Resources, transactions and rents: Managing value through interfirm collaborative relationships. Organization Science, 9, 326–339.
44.
Montgomery, C. A. (1985). Product-market diversification and market power. Academy of Management Journal, 28, 789–798.
45.
O’Shaughnessy, K. C., & Flanagan, D. J. (1998). Determinants of layoff announcements following M&As: An empirical investigation. Strategic Management Journal, 19, 989–999.
46.
Park, S. H., & Russo, M. V. (1996). When competition eclipses cooperation: An event history analysis of joint venture failure. Management Science, 43, 875–889.
47.
Powell, W. W. (1987). Hybrid organizational forms. California Management Review, 30 (1), 67–87.
48.
Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations. New York: Harper & Row.
49.
Singh, H., & Montgomery, C. A. (1987). Corporate acquisition strategies and economic performance. Strategic Management Journal, 8, 377–386.
50.
Stuart, T. E. (2000). Interorganizational alliances and the performance of firms: A study of growth and innovation rates in a high-technology industry. Strategic Management Journal, 21, 791–811.
51.
Turk, T. A. (1992). Takeover resistance, information leakage, and target firm value. Journal of Management, 18, 503–522.
52.
Walsh, J. P. (1988). Top management turnover following mergers and acquisitions. Strategic Management Journal, 9, 173–183.
53.
Zahra, S. A., Ireland, R. D., Gutierrez, I., & Hitt, M. A. (2000). Privatization and entrepreneurial transformation: Emerging issues and a future research agenda. Academy of Management Review, 25, 509–524.
54.
Zahra, S. A., Ireland, R. D., & Hitt, M. A. (2000). International expansion by new venture firms: International diversity, mode of market entry, technological learning, and performance. Academy of Management Journal, 43, 925–950.
